| James S. Baldauf President & Co-founder, ASPO-USA 512-250-8596 Partial Co-Signatories Tadeusz W. Patzek Chair, Department of Petroleum Engineering University of Texas William R. Catton Jr. Professor Emeritus, Department of Sociology Washington State University Seppo Korpela Professor Emeritus, Dept. of Mechanical Engineering Ohio State University David Goodstein Professor, Department of Physics California Institute of Technology Arthur E. Berman Independent Geologist David C. Blittersdorf President, AllEarth Renewables Jeffrey J. Brown Independent Geologist Terrence E. Backer State Representative, 121stDistrict, Connecticut Ronald Swenson Principal, Swenson Solar |
Jan Lars Mueller Executive Director, ASPO-USA 202- 997-7275 Albert A. Bartlett Professor Emeritus, Department of Physics University of Colorado Charles A. Hall Professor, Sch. of Environmental Science & Forestry State University of New York Robert L. Hirsch Senior Energy Advisor Management Information Services Inc. Deborah Cook President, Post-Carbon Institute Former Mayor, City of Huntington Beach, CA Roger H. Bezdek President, Management Information Services Inc. Richard Heinberg Senior Fellow, Post-Carbon Institute Thomas S. Whipple Retired CIA Analyst; Editor, Peak Oil Review Daniel L. Davis Lt. Colonel, U.S. Army Kenneth Zweibel Director, GW Solar Institute George Washington University |
Peak Oil is the point at which we reach a maximum rate in global conventional oil production. As we hit this limit to supply, prices will rise and production will shift to alternatives - but will these alternatives give us enough power to run our world? And at what environmental cost?
This "Peak Oil 101" presentation attempts to answer some of those questions. The presentation took place on September 23rd, 2011 and was hosted by Will Martin, the president of the energy club at the Johnson Graduate School of Management at Cornell University. Johnson alumnus and peak oil author Dr. Chris Martenson joined us by phone to answer questions.
Before the lecture, the energy club was primed by watching the following videos from Dr. Martenson's website:
http://www.chrismartenson.com/crashcourse/chapter-17a-peak-oil
http://www.chrismartenson.com/crashcourse/chapter-17b-energy-budgeting
http://www.chrismartenson.com/crashcourse/chapter-17c-energy-and-economy
Will Martin's Blog: http://www.peakoilproof.com/
Chris Martinson's Blog: http://www.chrismartenson.com
The Globe and Mail has run a piece by Jeff Rubin talking about how "the oil industry’s never ending ability to develop new extraction technologies and discover new sources of supply" has repeatedly confounded the Peak Oil community's ability to forecast the peak. He goes on to suggest that the apparent peak of oil production is a matter of economics rather than actual fossil oil supply. The article reads as if he's slamming the Peak Oil community, but I think he'd find most knowledgable Peak Oil people in agreement with what he suggests. Additionally I think they'd say that it's a question of price AND supply, rather than simply a question of price.
As he says, the U.S. oil production (lower 48 states) peaked as predicted by M. King Hubbert in 1971ish. One might suppose Hubbert made a lucky prediction, or one might suppose his theories were spot-on accurate. I don't know enough to pronounce either way. Rubin goes on to say
new sources of supply have been found in Alaska and under the Gulf of Mexico. And now oil sand production from Alberta and oil from the Bakken shale deposits may soon replace conventional oil in the mix of North American fuel.
Going further he references how the U.S. Energy Information Administration (and other energy information agencies) have stopped referring to fossil oil and instead have invented a new phrase, Energy Liquids, which
includes all kinds of energy sources we would not have previously called oil such as natural gas liquids, liquefied refinery gases, and even corn-based ethanol.
There are some slippery definitions here so let's be careful.
The phrase "Peak Oil" is generally defined in terms of fossil oil production. As he points out there are various other sources of liquid fuels that are being developed. We could have a peak of fossil oil production, and still have plenty of liquid fuels if there is development of enough production infrastructure for these other resources.
I've long felt the peak oil community was overly focused on fossil oil. There's obviously a fixed size amount of fossil oil and of course there will be a peak of production from fossil oil resources. When the doom and gloom end of the peak oil community declares that the peak of fossil production means "GAME OVER" and "IT'S MAD MAX TIME" they're saying they think other liquid fuel resources will not be able to replace the fossil oil resources we're accustomed to.
There's potential to replace fossil oil with other liquid fuel resources, but can we afford to do so?
To replace fossil oil production, new sources of liquid fuels must be developed. That means infrastructure to extract fuels from various places. Rubin mentions tar sands, shale oil, natural gas liquids, liquified methane, ethanol, and there are other potential sources.
Each requires investments of money and energy to extract liquid fuel. An important concept is Energy Return on Investment - EROI - which is the energy content of a fuel, versus the energy content used to generate that fuel. What was so attractive about fossil oil was that in its early days the EROI was 100:1, meaning 100 barrels of energy for each barrel of energy consumed in extracting that fuel. The EROI on fossil oil has dropped considerably since the gusher days. The closer EROI gets to 1:1 the less useful the energy resource is.
There's also the question of whether the money is available to pay for the machines and pipelines and whatnot that will be required to process, refine, extract, transport etc the fuels from these new resources. As liquid fuels they might likely be transportable through oil pipelines, but other steps in the process require wholly new machines and factories to be built. Where will the money come from in a time of global financial fracturing?
There's also the question of land use policies. Some of the resources like ethanol or other biofuels will require land devoted to growing fuel crops rather than food crops. Can we afford this?
For an interesting youtube presentation along these lines see: http://energy.7gen.com/2011/10/peak-oil-101-presentation-by-chris.html
Daniel Yergin has a new book out about the oil industry. It's a sequel to his acclaimed earlier book, The Prize: The Epic Quest for Oil, Money and Power. In the new book, The Quest: Energy, Security, and the Remaking of the Modern World, he discusses "energy" as the engine of global political and economic change, as well as central to the battle over climate change. The scope of the new book includes Beijing and China's growth, the oil reserves in the Caspian Sea, conflicts in the Middle East, political power struggles in Washington DC, technology development in Silicon Valley, and more.
Salon.COM just posted an interview with Daniel Yergin which shows his intelligence and knowledge, but also a somewhat flawed view. (See the link below) Basically he's too quick to discount peak oil, and too confident on new technology to save our bacon. I see a lot in the interview to agree with, and think he has a lot of important things to say.
Some context is the high oil prices in 2008 that had everybody all concerned. That is, until the financial crash in the fall of 2008 that overwhelmed our attention span. Since 2008 the price has gone up and down in a way that has many thinking "market manipulation by greedy tycoons". The common refrain against peak oil concerns is that obviously the price fluctuations aren't due to supply concerns, but due to market manipulation. I'm sure that market manipulation is a large part of the price fluctuations, but the core issue is that the easily tapped oil that's cheap to produce cannot sustain production levels to support the energy needs of our society. As that supply of cheaply produced oil tightens we're going to see many issues arise.
The Salon interview starts by asking him about the validity of Peak Oil
The peak oil argument is that we are already halfway through the world's endowment of recoverable oil. The argument that I am making is that the endowment is much larger, and technology keeps enlarging what we can recover.
He goes on to discuss some unacknowledged oil resources:
These are sources of fossil oil, to be sure. But are they examples of the sort of easily tapped cheaply produced oil reserves our society grew up on? No.
The presalt formations in Brazil have significant reserves (5-8 billion barrels in the Tupi field, with several other known fields bringing the totals much higher). The oil is light-sweet-crude that's easily tapped and processed. However, it's in deep water way off shore. The Tupi field is 160 miles off-shore from Rio De Janeiro. The water is 6,600 feet deep, and the oil is another 15,000 feet below the water. This is extremely deep drilling that's going to be highly costly to tap, and if there's an accident at the well might I remind you of the Deep Water Horizon disaster in the summer of 2010?
The Bakken Formation, as a shale oil reserve, will be requiring high energy inputs to extract oil. We're talking about rocks that are a bit oily, rather than freely flowing oil. The process to extract oil from these rocks requires heat and steam, which requires energy inputs to get the oil.
The point of mentioning these technological hurdles is that it shows Yergin is not taking into account the Energy Return on Investment. If it costs you a barrel of oil's worth of energy to get a barrel of oil, you're at a wash in terms of energy gain. What made the early years of the Age of Oil so successful was the energy gain at 100-to-1 ratios, where you'd spend 1 barrel of oil worth of energy, and get back 100 (or more) barrels of oil from the well. Over the years this ratio has shrunk considerably.
Yergin does suggest there have been recurring fears that we'll run out of oil.
There have been recurrent periods of great fear of running out of oil and it goes back to when oil was first developed as a commercial business in western Pennsylvania in the 19th century. It was always mysterious and people were predicting it would come to an end and we'd have to go back to using whale oil or coal or so forth. But each time there is this anxiety, what happens is new technology, new innovations, new areas open up, and the supply picture suddenly looks much better. So this current peak oil discussion is really the latest manifestation of what has been a recurrent feature since people started using and developing oil. But when you look at the numbers, we see that there is an additional supply coming in. My view is that rather than facing an imminent decline we'll see production of oil liquids continue to expand for a few more decades and then it'll come to a plateau. It won't necessarily fall off sharply.
I don't know enough to predict the shape of the fossil oil production/demand curves in the coming years. However it's telling that he uses the phrase "oil liquids" because that includes the possibilities of producing liquid oil products from sources other than fossil oil.
What the peak oil community fails to take into account is that fossil oil isn't the only source of oil liquids. There are plenty of plants and animal sources that could be tapped. Further tapping biomass sources (plants and animals) does not worsen the carbon footprint in the atmosphere, because it doesn't re-introduce carbon that had been sequestered zillions of years ago. However the concern with biomass sources is the competition against use of biomass for other purposes such as food, clothing, timber, paper, etc.
In any case as he points out, new fossil oil resources have to be developed, which takes time and money. There may not be enough time for these new fossil oil resources to be developed before the oil supply crunch hits us hard. And there may not be enough money, given the current debt crisis rocking the world financial markets.
The next thing they talk about is the global energy dominance struggle between China and the rest of the world. Yergin says the Western powers (Europe, U.S., Japan) is going to see a decrease in fossil oil demand because "we are going to be driving more efficient cars by 2025.. [that are] supposed to get up to 64 miles to the gallon."
Okay, yes, the Obama Administration did push for stronger CAFE standards which require much higher miles/gallon efficiencies by 2025. While the car companies do produce high efficiency cars for sale in Europe they've dragged their feet in doing so for America. Higher fuel efficiency will decrease the oil demand curve and he later says "energy conservation" is grossly underestimated because it is in effect an energy source.
However one thing going on about China is that consumption which formerly happened in the West is now happening in China due to the outsourcing of manufacturing etc to China.
Yergin refers to a Japanese term, "Mottainai", which he describes as "too precious to waste."
In the U.S. we had so much oil for so long that we don't understand fossil oil as "too precious to waste". He suggests, and I agree, that we need to rearrange our thinking about fossil oil.
I see a lot in the interview to agree with. For example the "energy security" issue that is a huge threat to the U.S. (and other countries). The "energy" (better term is to call it what it is; fossil oil) that drives our society is the foundation of our wealth. Our lifestyle is in absolute dependance to keeping fossil oil resources flowing into our gasoline tanks.
However this issue is largely unrecognized in the popular discourse. Instead there's a lot of misinformation out there suggesting it's not that big a deal. And of course the Republicans are using this as a wedge issue to make more false slander against the Obama administration.
Synopsis:
In this gripping account of the quest for the energy that our world needs, Daniel Yergin continues the riveting story begun in his Pulitzer Prize-winning book, The Prize. A master storyteller as well as a leading energy expert, Yergin shows us how energy is an engine of global political and economic change. It is a story that spans the energies on which our civilization has been built and the new energies that are competing to replace them. From the jammed streets of Beijing to the shores of the Caspian Sea, from the conflicts in the Mideast to Capitol Hill and Silicon Valley, Yergin takes us into the decisions that are shaping our future.The drama of oil-the struggle for access, the battle for control, the insecurity of supply, the consequences of use, its impact on the global economy, and the geopolitics that dominate it-continues to profoundly affect our world.. Yergin tells the inside stories of the oil market and the surge in oil prices, the race to control the resources of the former Soviet empire, and the massive mergers that transformed the landscape of world oil. He tackles the toughest questions: Will we run out of oil? Are China and the United States destined to come into conflict over oil? How will a turbulent Middle East affect the future of oil supply?
Yergin also reveals the surprising and sometimes tumultuous history of nuclear and coal, electricity, and the "shale gale" of natural gas, and how each fits into the larger marketplace. He brings climate change into unique perspective by offering an unprecedented history of how the field of climate study went from the concern of a handful of nineteenth- century scientists preoccupied with a new Ice Age into one of the most significant issues of our times.
He leads us through the rebirth of renewable energies and explores the distinctive stories of wind, solar, and biofuels. He offers a perspective on the return of the electric car, which some are betting will be necessary for a growing global economy.
The Quest presents an extraordinary range of characters and dramatic stories that illustrate the principles that will shape a robust and flexible energy security system for the decades to come. Energy is humbling in its scope, but our future requires that we deeply understand this global quest that is truly reshaping our world.
See:
http://www.salon.com/life/feature/2011/09/29/yergin_the_question_interview/index.html
American economist Jeremy Rifkin has a new book out, The Third Industrial Revolution, in which he argues that the current economic woes are a symptom of a deep problem rooted in the dependence on fossil fuels. Of course that's true and to me it's shocking that it's such an under-recognized problem. Rather than being symptoms of a temporary economic malaise, the unemployment, rising food prices, rising debt and more are signs that the current world order -- long infused with and defined by fossil fuels -- is collapsing around us. To understand one should study up on the role of fossil fuels in creating the marvels of our age, and then turn to studying peak oil and the collapsing supply of fossil fuels.
Ask yourself: What does Economics 101 say about "supply and demand". When demand for some product outstrips supply, the price of that product goes up. Yes? Simple economics theory. What about if that product is a fundamental requirement to keep "the economy" moving? What if the supply of that product starts diminishing and can never again be increased? What if a large part of the political leadership is either ignorant of the diminished supply, or in outright denial, and instead of proposing rational solutions continue to promote continued dependance on the fuel whose supply can never be increased?
That's where Peak Oil is leading us. In Rifkin's book there have been two industrial revolutions, and that a third one is underway as we speak right now. The third industrial revolution will lead to a grand new era of collaborative business that's more about creative play, peer-to-peer interactivity, social capital, participation in open commons and access to global networks.
The Third Industrial Revolution is the last stage of the great industrial saga and the first stage of the emerging collaborative era rolled together. Implementation will be forced by diminishing supply of fossil fuel, and enabled by the "democratizing" influence of distributed power generation. Distributed power generation doesn't require the top down domineering of industrialized power systems. Somehow Rifkin believes that "we" will automatically implement democratized power as if the powers-that-be will allow it to happen.
The industrial revolutions were powered and enabled into existence by fossil fuels. It wasn't purely intellectual genius freed from religious domination that created the industrial revolutions. It was the harnessing of fossil fuels and the huge energy resources stored within them. Fossil fuels like coal, oil and natural gas are reservoirs of sequestered carbon and solar energy captured millions of years ago by plants and animals. Their dead bodies piled up and became trapped underground where natural forces converted their tissues into fossil fuels.
In the 1700's-1800's engineers and industrialists made the first steps to developing technology to mine those fuels, prepare them for industrial use, and use the energy to build vast industrial empires. It's been a great ride, hasn't it? However 300 years later and we're now at the mid-point of the fossil fuel resources the planet captured for us. It's all downhill from here. That is, the energy available from fossil fuels can only decline from here out. And the politicians who suggest otherwise ("Drill Baby Drill") are deluded or insane or something.
Rifkin sees this third industrial revolution as a transitionary phase from industriousness to collaborativeness. Industrial ages are characterized by "values of rigid discipline and hard work, the top-down flow of authority, the importance of financial capital, the workings of the marketplace and private property relations". This was required by fossil fuels because of the centralized nature of fossil fuel resources. But as fossil fuel becomes scarcer it's going to force us into a new mode of society.
Rifkin suggests the shift will rely on renewable energy resources (Solar, Wind, Biomass, etc) all of which are available "anywhere". We won't be reliant on centralized energy resources but distributed ones.
He says "The democratization of energy has profound implications for how we orchestrate the entirety of human life in the coming century." It means an era of distributed capitalism because energy resources are available everywhere. He suggests the dispersed energy resources will be collected from everywhere and bundled and shared with others over a distributed "energy internet".
The distributed nature of distributed energy generation supposedly forces lateral power structures rather than the top down domineering ones of the industrial revolutions.
However - as compelling as the vision is, I wonder if the powers-that-be will allow it to take shape that way. The powers in charge have rarely acted in the interests of individuals, and always acted in the interests of keeping those in power still in power. Is some of the denialism about energy resource problems due to those in power trying desparately to keep the game going so they can remain in power?
It seems there's a huge interest in undermining the green tech/jobs revolution the Obama Administration wants/ed to unleash. At the current moment we have another budget showdown in Washington DC and the government grants/loans programs for advanced green transportation technology has a gun held to its head with the Republicans saying we need to stop funding such programs in order to balance the budget. Developing this kind of technology will act to undermine the old order of fossil fuel dependence. Electric vehicles participate in the democratized energy system because a home owner can have enough solar panels on their house to fuel their electric car with electricity, and not have to pay anybody a dime for fuel. Is the threats against electric vehicle technology programs meant to keep us captured by fossil fuel interests for transportation fuel?
The question is why in the one case (Appalachia) it warrants calls for immediate cessation and in the other case (Alberta) it doesn't.Currently, the majority of bitumen is recovered by surface-mining practices that require the clearing of large areas of land, resulting in loss of habitat, including migration corridors and breeding grounds for terrestrial and aquatic species. Methods for mitigating and remediating these effects are under development, but even when remediated the habitat will be considerably different from its previous state. These externalities are costs that should be considered when developing this resource....
Global demand for oil and the resulting economic potential mean that development of oil sands will continue. This development has the potential to impact society and the environment significantly. It is essential that any detrimental effects be mitigated as much as possible and that development proceed in a manner that minimizes effects on the health and welfare of the environment, wildlife, and humans like.
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In October 2009 the UK Energy Research Centre released an indepth report on Peak Oil. In this episode of the Technosanity Podcast we go over several articles discussing the report.
Articles discussed in the podcast:-
"Global Oil Depletion" a report on Peak Oil by the UK Energy Research Centre is my summary of the report. Of especial interest is the following two charts.
This shows the rate of oil discovery over the years, and shows that the peak of oil discovery occurred in the early 1960's. The lack of discovering oil is not due to a lack of searching, it is due to a lack of finding. The lack of finding new significant oil discoveries implies strongly that the fossil oil resources on this planet have all been tapped out.
The important wedges in this chart are "Crude oil - fields yet to be developed" and "Crude oil - fields yet to be found". Looking at the chart it appears the IEA expects on the order of 40 million barrels/day will come from those two sources. The first, fields yet to be developed, is oil that's known to exist but hasn't had infrastructure installed to extract the oil. The fields yet to be developed require extensive investment to install that infrastructure.
The fields yet to be found simply aren't known yet. Where are they? We don't know. The IEA is putting a lot of credence in the wish or hope or expectation that those fields will be found. Maybe they'll be found, maybe not.
There needs to be a long lead time to install the infrastructure - something like 10 years to build out an oil field full of oil derricks etc.
Peak Oil - It's Still Coming, It May Be Delayed Though, Whither Resilience and Transition? Why ‘Peak Oil’ Has Yet to Outlive its Usefulness, Oil production could peak in 10 years' time, Have We Reached Peak Oil? and A post-oil world gets less sci-fi by the day all go over the same UKERC study.
The UKERC study warns that the world society will have to find 64 million barrels/day in production by 2030 to replace the decrease in production they expect by then. This is shown on the above chart. But it's not clear where that oil will come from.
Canadian tar sands? The Canadians doubt they'll ever get more than 3 million barrels/day in production.
There are four key issues about oil production and which together point to a supply crunch sooner rather than later.
Reflections from ASPO: Contradiction, EROI, and Future Energy Supplies is a look back at the recent conference of the Association for the Study of Peak Oil. He talks at length about Energy Return on Investment (EROI) in regard to some claims about "Shale Gas" resources. Someone claims there's 200+ years of natural gas available from Shale Gas. However what's missing from that claim is the EROI of extracting that gas, and if it requires a lot of energy to extract natural gas from shale then is it worthwhile to do so?
The UK Energy Research Centre handles research into energy issues for all of Britain. On Oct 8, 2009 they released an indepth study of oil production, the ways to measure oil reserves, estimate current and future production, etc. They paint a picture of peak oil and the need to move to other energy resources. It's not that they are whole-hog embracers of peak oil, instead this is a serious and indepth explanation of the issues with eye opening charts, data and discussion. The following is my summarization of the main report, they also published 7 additional reports containing a flood of technical data.
Abundant supplies of cheap liquid fuels form the foundation of modern industrial economies and at present the vast majority of these fuels are obtained from ‘conventional’ oil. Conventional Oil is the high quality stuff that got us hooked the potent energy source that it is.
Many forecast a near-term peak and subsequent terminal decline in the production of conventional oil as a result of the physical depletion of the resource. Others claim rising oil prices will stimulate investment that will increase supply to meet demand. But those who point to stimulated investment tend to reply on use of nonconventional oil such as tar sands conversion. Also as we'll see financial troubles raise the doubt of whether the required production capacity investments can be made, because of doubt over availability of capital.
While there is popular attention on peak oil, official attention is scarce or dismissive. "Most governments exhibit little concern about oil depletion, several oil companies have been publicly dismissive and the majority of energy analysts remain sceptical."
Key conclusions
Policy implications
Current economic problems have lead to a major reduction in global oil demand, a major fall in price ($150/bbl in July 2008 to $40/bbl in Jan 2009) and the cancellation or delay of many projects that would act to increase production capacity. Given the long lead time required to get oil production projects underway the cancellation of projects makes likely a supply crunch in a few years e.g. if global oil demand increases again will the demand increase faster than the production projects can get restarted?
These are examples of a couple oil peaks. Conventional oil production raised to a point and then declined once production levels were unable to be sustained.
Classifying the different kinds of oil is key to gauging the problem. When conventional enters terminal decline will there be other resources which can pick up the slack? There's nothing magical about fossil oil, it's possible to make oil through other means. Some questions about this are: Is it possible to replace the supply provided by conventional oil by some other fuel source? Are the replacement fuel(s) better or worse for the environment? Do the replacement fuels have as high an energy return on investment as conventional oil does? How quickly can the switchover to other resources be made?
The energy return on investment (EROI) is a measure of the net energy gain from the production of oil and other resources, once the energy used in extraction and processing has been taken into account.
This is again focused on conventional oil and shows that the peak of discovery for conventional oil was in the early 1960's. Note well above in the key findings that to make up for production decline that new production sources are required at a rate of another "Saudi Arabia" (3 million bbl/day equivalent) every 3 years. The world society has been coasting on the fumes of old oil discoveries for over 40 years. The lack of new oil major field discoveries represents a major problem looming in front of us.
The U.S. DOE EIA produced this forecast of future oil production. Note the two wedges in the middle. They are marked "Crude Oil - fields yet to be found" and "Crude oil - fields yet to be developed". These wedges represent the production shortfall that's looming in front of us. The key phrase is "...yet to be..." because that is production capacity which does not currently exist. For it to exist new oil wells, pipelines, refineries, and transport ships have to be built. Often the new oil is far offshore so "oil well" is an expensive oil platform. Then there are the oil fields yet to be discovered. Where are they and why haven't they been found yet?
Much of the paper is devoted to statistical modeling of recoverable reserves, the claimed reserves, the potential for new discoveries, and the decline rates.
There is a big controversy about claimed oil reserves. Some companies appear to be playing tricks with their claimed reserves and that the publicly claimed numbers are widely thought to be bogus. The root cause is the relative power strength of OPEC decision making is based on their reserves figures. Saudi Arabia claims to have the most reserves but their numbers have been suspicious.
A group of British companies concerned that threats to energy security are not receiving the attention they merit.
The economy in a bad shape right now. That's caused a global economic slowdown and.. it has resulted in lower demand for oil. While it's not quite good for the oil companies (not that I care about their wellbeing) it offers us a breather in the peak oil scenario and offers an illustration of some economic facts related to oil. If nothing else this demonstrates a statement by Peter Wells at the 2008 ASPO conference. He described the oil producing countries, especially Saudi Arabia, as knowing very well there's a fine line to tread in setting the oil price, make it too low and the oil gets used up rapidly (and their income is low), set it too high and the customers either go out of business or start looking for alternatives, and therefore they look for a middle ground in pricing oil to make enough profit to keep themselves happy while keeping it low enough to keep their customers from looking for alternatives.
One thing this means is that with lower current demand for oil indicates a possible "plateau peak". In The Shape of Oil to come I discussed the shape of the peak of oil production. Some people are "sharp peak" thinkers, saying the peak of oil production will be followed by a drastic reduction in oil production, whereas others are "plateau peak" thinkers saying the decline in production will be gradual. If the peak which occurred a couple years ago is truly the peak of oil production, a decline in oil demand due to economic woes will contribute to a gradual decline hence put us in a plateau peak scenario.
Having a decrease in oil production because of lower demand is preferable to a production decrease because the oil fields are physically incapable of producing more oil. It means there is still spare capacity in the oil fields in case the economy recovers and again increases demand for oil.
Demand for oil drops as outlook for G7 remains grim
The global crisis is sharply reducing demand for oil, and oil consumption is reaching levels last seen in the early 80s, a report from the International Energy Agency showed. The agency slashed its economic forecasts for the fourth time since October and now expects the world economy to contract by 1.4% this year, a sharp reversal from its previous forecast of modest growth.... The IEA is now forecasting that oil demand will fall by 2.4m barrels a day this year from 2008. The agency estimates that the world economy will need 83.4m of oil a day, 1m less than its previous forecast and the lowest level since 2004.... Oil inventories have built up to cover a "giddy 61.6 days" of consumption, the highest level since 1993. In response, producers have cut back output...The IEA expects producers outside Opec to pump about 50.3m barrels a day this year, down 300,000 from 2008.
Oil Prices: Is Crude Demand Collapsing or Not?
But do the new IEA numbers really mean that the global oil-demand picture is getting worse? ... In the IEA’s view, oil demand is collapsing a lot faster than supply, setting the stage for lower oil prices in coming months. ... weaker demand is partially offset by a big slump in crude production. The more that supply picture tightens—as oil companies postpone expensive new investments, for example—the likelier it is that oil prices will rebound, recession or not. ...
Believe it or not, there may be one compelling reason why we'd rather not crawl out too quickly from the economic crevasse into which we've fallen. Remember less than a year ago when crude was flirting with $150 a barrel? A sudden solution to our mounting economic difficulties in the face of declining oil production just might slingshot prices higher than we'd like to have them.
World is awash with oil as demand sinks: IEA
The world is awash with oil despite a price rally but the glut is hampering investment in fields which will be needed when demand pulls out of a "relentless" plunge the International Energy Agency (IEA) said on Friday.... Oil producers were "scrambling" to cut back on deliveries to limit a build up of inventories which were "now at a giddy 61.6 days (of consumption) for February", the highest level since 1993. The Organization of Petroleum Exporting Countries had cut its output overall by "an unprecedented" actual 3.36 million bpd since September to below 28 million bpd, the lowest level since just after the US-led invasion of Iraq in 2003. While the prospects for lower demand have muted concerns about a "supply crunch," the IEA warned that resulting low oil prices could undercut investment in future production.
Provides research, talks, and professional presentations concerning Peak Oil and its impacts. We also consult with individuals, organizations, businesses, and governments regarding decisions and risk management planning for Peak Oil.
An independent, UK-registered educational charity working to raise international public awareness and promote better understanding of the world's oil-depletion problem.
ODAC was founded in June 2001 on the belief that an informed public debate about the likely impacts of depleting oil supplies is critically needed. A growing number of experts now predict that world oil production will reach its ultimate peak within a few years and then start permanently to decline, while the prevailing view of most energy policy-makers and institutions is that near-term oil supply is mainly an economic and geopolitical concern. Under almost any scenario, however, lead time is running short for a smooth transition to new energy systems and a less oil-dependent way of life.
A blog about peak oil however it appears to be very old, the last update was over 3 yrs ago.
Early in running the 7gen.com blog I thought it might be nice to have a newsletter, but then found I didn't know what to put into a newsletter. The newsletter subscription form was on 7gen.com for several months and a dozen people signed up. So I turned off the newsletter subscription form and disabled that feature.
I now have an idea of how to handle the newsletter and have turned the features back on. You are reading the first of the reconstituted 7gen.com newsletters. In future issues I expect the format will be: a) Main article that's representing some big/main topic, b) recent updates to 7gen.com. I think this will be published monthly with occasional special issues if there is breaking news to cover.
Since it will have been awhile (cough cough) since you signed up for this newsletter, you may have forgotten about 7gen.com .. please visit http://www.7gen.com. If you do not wish to remain on this newsletter there is a link at the bottom allowing you to unsubscribe.
My interest with 7gen.com is exploring our humanity as we live in a sea technology and how that impacts us. The name of the site obviously derives from the law of the Iroquois Confederacy "In our every deliberation we must consider the impact of our decisions on the next seven generations." While that's a marketing slogan for a particular household products company in the U.S. I thought it was an interesting point of view, an interesting way of looking at the world and a useful benchmark for making decisions about living in this world.
Rather than simply have that be a nice feel-good slogan on some of the household products I buy, it called me towards exploring how it would work for real in real life.
It seems clear to me a lot of the problems we face in the world are the result of short term thinking driven by the desire to fulfill short term needs. Ignoring the long term is leading us towards catastrophes that threaten our life on this planet.
Consider the combination of oil supplies and and the "Drill Here Drill Now" mantra shouted during the U.S. elections last year. The high likelihood is that soon our fossil oil production will enter an inevitable and unavoidable decline. This is called "Peak Oil" and it's an effect that's been observed in oil field after oil field all over the world. The global oil peak has either already happened or will happen soon.
The Peak Oil effect is that once oil production reach their peak even the mightiest efforts of the oil companies cannot increase the amount of oil being produced. The U.S. passed its peak of oil production in 1971 and it is folly to think drilling in oil fields within the U.S. will affect oil supplies in any huge way. The "Drill Here Drill Now" mantra is short term delusional thinking that was meant for political games but makes zero practical sense.
Yes there are untapped oil fields in the U.S. However some of them are in sensitive wildlife refuges and I fail to understand how the operation of an oil field is compatible with a wildlife refuge. Next, drilling an oil field is not an overnight operation, it takes 10 years or more to take an oil field into production along with billions of dollars in investment. Next, it is perhaps strategically important to keep the oil in the ground for later use rather than use it all up now. Last, the amount of oil in these untapped fields is a drop in the bucket compared to the demand for oil.
Rather the practical useful sensible choice is to find alternate ways to accomplish the purposes for which we use fossil oil. Fossil oil is primarily used for transportation. Hence finding other ways of moving our butts around town is a critical need. Thankfully the "Drill Here Drill Now" did not get elected but it is a powerful mantra shared by many people in the U.S.
Those outside the U.S. may be more resilient to the coming oil shortages since their countries did not adopt cars as completely as we have done so in the U.S.
A major addition to 7gen.com is the Seven Generations Technosanity Podcast. http://www.7gen.com/technosanity .. The episodes are both in audio and video and are covering a range in topics. Last year I did several episodes about Peak Oil and most recently am building a new electric bicycle and am making construction videos as I go along.
Peak Oil websites: http://www.7gen.com/taxonomy/term/1691
Peak Oil blog posts: http://www.7gen.com/topics/energy/peak-oil
Electric Bicycle websites: http://www.7gen.com/website-categories/electric-bicycles
The amount of danger presented by the peak oil scenario depends on the future decline in oil production. That is, the peak oil scenario says (based on observations from around the world) that after some point of oil extraction and production the worlds oil production will inevitably enter a decline and that once world oil production begins to decline no way will it ever increase.
The timing of this decline depends on future oil discoveries. The more oil discovered in the future the further out into the future will be the peak, and hence the longer we have to find a solution. But it's rather difficult to accurately predict the future such as future oil discoveries, obviously.
The various estimates of when the oil peak occurs are all based on estimates of this prediction, what is the amount of future oil discovery.
For example: Between 1995 and 2005, nearly 110 Gb of conventional oil and NGL have been discovered. A reasonable, but optimistic, scenario is to assume that this pattern of discovery will remain the same for the next 22 years. However they go on to say this is an unreasonable assumption because it's more likely that the rate of discovery will also decline over time.
Specifically the world peak of oil discovery occurred in 1964 and has been declining ever since.
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